Property Stories Why Property Agents Are Necessary For Your Property Transactions – Here Are 4 Good Reasons
- April 19, 2020
- 7 min read
At Stacked – we monitor the real estate market very closely. This means we are very aware of the business models of developers, real estate agencies and property agents themselves.
Our main concern today is that of the property agent.
There have been many attempts to revamp the business model of property agents.
We see certain agencies being set up to charge a fixed fee model. You pay about $2,XXX (or even cheaper) – all in – to sell your home.
We even noticed that HDB set up a resale portal to simplify transactions for HDB owners. You have a willing buyer and willing seller – just go through the HDB resale portal and bypass agents altogether.
And then in Singapore – where there is strong distaste for property agents – a lot of people out there believe that agents are not necessary or needed for a property transaction.
Right? Furthermore the exams they take and the licence they received – it has the word RES inside. Real Estate SALESPERSON.
They do sales! And we hate that word with a vengeance. Correct?
And despite all of that, there are easily 30,000 property agents in the market. Thousands of transactions are handled by property agents each and every month. Residential & commercial. Ranging from buy/sell/rent transactions.
Time and time again, people have been trying to cut them out of the deal.
And believe you me, no one knows that better than us.
After all, our founding story was all based on the premise of cutting the property agent out.
So while it might sound like a dramatic u-turn on our part – the truth is that it just makes us all the more credible in communicating the value of a good property agent.
Let us explain why agents are necessary for your property transaction:
#1: They have more experience and more knowledge than you.
Most property agents who are doing on a full-time basis usually will have a few years of experience and transactions under their belt. They also have to attend required training sessions to meet their CPD hours and maintain their proficiency and knowledge.
Most of us only have 1 home and that means we only went through 1 single property transaction.
So our context and knowledge are very limited compared to an agent who probably handles dozens of transactions per year.
Their context is far wider and experienced agents would have seen their share of profitable and loss-making property transactions.
So don’t discount this fact – they have seen many similar circumstances or cases as they are on the ground daily. It is likely that their advice or knowledge is based on the reality of the ground.
#2: They are the third party who helps keep your emotions in check
In divorce cases, couples engage lawyers to represent them on their behalf. Why? Because it is going to be a painful process and a lot of emotions will be brought up. Simply put, couples who break up cannot be trusted with their own negative emotions.
And that’s why a lawyer who is able to separate the emotions out is needed. In fact, a lawyer is necessary to keep the entire process at arms’ length.
Similarly, when selling or buying a property – emotions will come up. And sometimes – people will make poor decisions because they are being “driven by emotions.”
Imagine you are selling your own property yourself because you decided not to engage an agent.
If you were to get a lowball offer – would you be upset and insulted? Especially when you spent significant sums of money on your interior renovations.
Would you even start negotiating or would you completely shut them down? In both situations – you have to acknowledge you might not have the experience to handle this perceived rejection of your price.
This is when you realize a good agent would do their best to negotiate or even try to strike up a better deal on your behalf. Why?
Because they have no emotional attachment to your property. But their goals will be aligned to yours – just with no emotional baggage.
A good agent will be focused on getting you the best deal possible.
Which brings to my next point:
#3: Good property agents are entrepreneurial
This is a key reason why I believe that real estate agencies offering fixed fees to sell a property are not taking off.
When the amount of money a real estate agent earns is fixed, there is absolutely no incentive to work harder to get a BETTER price for a property. The real estate agent becomes more like a salaried employee who works just enough to get the deal done.
This in comparison to a real estate agent who is committed to getting the best selling price for his client.
An agent who is selling a property on behalf of his client is usually paid a 2% commission of the final selling price. So he or she has a greater incentive to secure the highest price possible.
And when there is sufficient incentive, a committed agent will do the following:
- Spend good money to promote and market the listing on PropertyGuru or similar platforms
- Run advertising campaigns to make sure the listing can be found easily by all potential buyers
- Arrange viewings for potential buyers and making it convenient for them to do so
- Managing their own client’s expectations
- Do their best to negotiate and bringing the highest value to their clients
Property agents – being self-employed – have to work hard without the guarantee of a monthly pay cheque.
No closing, no transaction, no commission, no money.
But they can spend all their money in the above situation – even with no guarantees of a confirmed transaction or closing.
But it is the reality of being self-employed which all good agents accept. It is part of their expenses in running a real estate business.
#4: Peace of Mind – Especially With The Right Agent
If you really think about it, the really entrepreneurial agents – especially those who believe in adding a lot of value to their clients – they will realize this.
Having the welfare of their client at heart is their ONLY guarantee to long-term success.
A happy client who feels they were served well will easily result in multiple referrals.
And definitely, referrals will certainly help any agent in growing their real estate business.
So if such agents were to work backwards – how would they get happy clients and get lots of referrals in the process?
The answer is simple but not at all easy to do.
Become someone who adds a lot of value or creates significant value for their potential clients or existing clients.
In fact, the really great agents have a strong sense of self-awareness and empathy for their clients’ needs and requirements.
What I painted above is basically the ideal agent we hope to hire.
- Someone who holds our hands during the entire process
- Provides great context to help in the decision-making process and
- Cares more about their client’s welfare than their own.
But in any business or trade, they are always bound to be black sheep who can taint the entire industry. This is something we must recognize and accept.
So how do we make a decision on whether an agent is suitable to work for us? How would we know? How do we pick the right agent?
The answer is this – we can’t always be right on a person’s character. But they do leave solid clues.
That is why if you decide to consult with Stacked regarding your next property choice – we guarantee that you will be well-supported with your welfare at heart.
We firmly believe that we are earning your trust slowly through our solid content and articles that are fairly written for the consumer market.
Ready to get started on exploring your various property options? If you are keen, I invite you to visit this link to reach out.